Posted on 24 Jan 2025
One-third of the industry will soon vanish if the European Union does not shield it from unfair import competition, according to Alain Le Grix de la Salle, head of ArcelorMittal France.
Kallanish hears this claim from a hearing with the committee of economic affairs at the Assemblée nationale in Paris, the French parliament. When asked by a member of parliament to guarantee that no French sites will be shut down this year, de la Salle responded that the European steel sector is experiencing a deep crisis.
“At this moment, I am unable to provide any sort of commitment or response to this question. It is essential to acknowledge that all sites across Europe, regardless of the country, are at risk" of closure, de la Salle warns. "We told the European Commission several times the fact that the sites in all countries are all at risk in Europe and also in France.”
De la Salle continues by saying that the organisation is being significantly harmed by unfair imports from third countries and high energy costs.
“We are not against imports. We request that they be limited so they do not have a devastating effect on our industry as they currently do. We request fair competition conditions, especially regarding the cost of CO2. Another issue we are facing is the rising energy costs in Europe, which are making it harder for our industries to compete. This crisis clearly affects us and our clients as well. Energy costs in Europe are some of the highest in the world. Gas prices, for instance, are four to five times higher than in the US. [There] is the drop in steel demand in Europe, especially in France. This decline is significant, averaging 4% per year, or at least 20% over the last five years," de la Salle explains.
Furthermore: "We rely on our clients... If demand falls or disappears, we must react. When all temporary measures of cost and capacity reductions do not work, we have to adjust our capacity to match what our clients level of demand.”
De la Salle adds that part of ArcelorMittal's client base in France is made of many small and medium-sized businesses for which activity has been steadily declining with a consequent loss of competitiveness.
The steelmaker said last year it was suspending decarbonisation investments at its Dunkirk facility in northern France due to the downturn in the global steel industry. According to market sources, the decarbonisation investments at the firm’s Ghent plant are also in doubt. De la Salle confirms that the firm plans to monitor various developments in 2025 before reaching a conclusive decision on the feasibility of its decarbonisation investments in Europe. These developments include the planned review of the Carbon Border Adjustment Mechanism (CBAM), a forthcoming assessment of EU steel safeguards, and the release of the Steel and Metals Action Plan.
Last year, ArcelorMittal’s French service centre division confirmed it will permanently close the Reims and Denain sites in northern France (see Kallanish passim).
“We need to react and adapt, and that's what we're doing. Europe must recognise the serious risk to our industry, and take the necessary measures to safeguard its steel industry,” a spokesperson for ArcelorMittal states. The company hopes for “strengthened and permanent trade safeguard measures to adapt import volumes to the size of today's European market [and] a reform of the [CBAM] to make it effective, and enable us to compete on equal terms on the cost of carbon. We await the publication of The European Steel and Metals Action Plan, and Clean Industrial Deal, announced for the first quarter of 2025, which will be crucial for steelmaking in Europe.”
Source:Kallanish
